Agricultural Productivity and Structural Transformation. Evidence from Brazil
51 Pages Posted: 7 Mar 2014 Last revised: 17 Jun 2015
Date Written: June 1, 2015
We study the effects of the adoption of new agricultural technologies on structural transformation. To guide empirical work, we present a simple model where the effect of agricultural productivity on industrial development depends on the factor bias of technical change. We test the predictions of the model by studying the introduction of genetically engineered soybean seeds in Brazil, which had heterogeneous effects on agricultural productivity across areas with different soil and weather characteristics. We find that technical change in soy production was strongly labor saving and led to industrial growth, as predicted by the model.
Keywords: Agricultural Productivity, Structural Transformation, Industrial Development, Labor Saving Technical Change, Genetically Engineered Soy
JEL Classification: F16, F43, O14, Q16
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